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UTPhil2006

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We were going to put our house on the market in a few weeks and word got out. Long story, but we had a bunch if people contact us over the last few months and after speaking with someone got an offer from someone with a broker.

Going over the offer, they have an FHA loan. The only problem I see with the contract is that they can get out 3 days before close if it doesn’t appraise (Property Approval). That’s a problem. Can I write something to shorten that up? We’re going to close in 45 days.

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@kmac30  Oh hell yeah.   

1st question...How much are you paying the broker?  Is he only representing the buyer, or is it dual agency?

You should definitely shorten the appraisal contingency period to 14-17 days.  That's PLENTY of time for them to order and receive the appraisal.   Since it's FHA, you will have to agree to let them out of the deal if the appraisal doesn't come in. 

What condition is the house in?  FHA  has certain requirements that must be met (the appraisal is a combo appraisal/inspection, not to be confused with the home inspection that the seller will likely obtain).  The home must have working heat for example.  No holes in window screens.  If you 've got bad screens, toss them, otherwise you'll have to fix them.   You need a smoke alarm for each bedroom and each hallway.  You'll need a carbon monoxide detector, and these need to be  installed prior to the appraisal.   

EDIT Also, you should make sure that their inspection period is also shortened...15 days  is plenty.  

So, in a couple of weeks, you'll know how the inspection and appraisal turned out, and at that point you're just hoping and waiting that they don't get laid off or something.   Was a loan approval included with the offer?  If not, insist on one, and call the lender to discuss and verify.  

 

EDIT 2: if you Texas boys know something particular to TX law that refutes the above, please speak up. 

Edited by Gil Bang
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53 minutes ago, UTPhil2006 said:
Write in a clause that buyer is to pay difference in Appraisal if necessary. Shoot me an email and we can facilitate this for you if you want. 

That’s illegal on FHA deals.

 

Edit: perhaps “illegal” is a bit strong. However, that sort of clause is strictly prohibited. I thought that was a national rule but perhaps it’s California only. But, since FHA is a federal program that wouldn’t make any sense

 

EDIT 2:  Yep, it's a national rule.  All parties must sign the "Amendatory Clause".  It's right in the FHA underwriting guidelines

"It is expressly agreed that notwithstanding any other provisions of this contract, the purchaser shall not be obligated to complete the purchase of the property described herein or to incur any penalty by forfeiture of earnest money deposits or otherwise unless the purchaser has been given in accordance with HUD/FHA or VA requirements a written statement by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct Endorsement lender setting forth the appraised value of the property of not less than $_________. The purchaser shall have the privilege and option of proceeding with consummation of the contract without regard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and Urban Development will insure. HUD does not warrant the value or the condition of the property. The purchaser should satisfy himself/herself that the price and condition of the property are acceptable."

Edited by Gil Bang
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Also, Phil, what is with the $750,000 loan limit? I’ve never heard of a limit that high. Last I checked they max out in the 6’s and that’s in really expensive counties. Is that a Texas-only thing?

 

We have “Cal Vet” out here, which is different than VA.

 

 

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Yes. Honorable discharge is all you need. Medical discharge ok in some circumstances. Must’ve served six months in peacetime or 90 days in wartime
 
Reserves are eligible after six years
 
Do you have your DD 214?
 
Yes, I have my DD214. I was active duty and got out a little after 2 years when they did the big RIF after the Berlin Wall came down.
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Also, my wife is a teacher and keeps getting info about teacher incentives when buying a house, but I'm not sure if we'd have to buy in her district or whether going VA for me negates that for her. Or whether they can piggyback.

We're not sure we want to move until our last kid is out of daycare (2 more years) as we're paying a lot less where we are now than what we'd pay elsewhere, so this is more for info purposes at the moment.

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The teacher loans that I have seen are usually comparable to VA as they are no money down etc.

I’ve heard of some that are straight grants, they give you a loan for a down payment and if you stay in the home long enough the loan is forgiven.

I would say when you are ready to buy, sit down with Phil or another knowledgeable lender and see what’s exactly available to you and make a decision at that time.

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Thanks for the info. I spoke with the realtor and we came to an agreement. They want this deal to go through and so does the realtor. A call for the appraisal was made On Friday. It hasn’t been scheduled yet but I’m expecting to hear back Monday or Tuesday. It should be complete in a couple weeks and we’ll know then.

In the mean time we’re reaching out to some other interested parties and letting them know what’s going on.

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17 hours ago, Gil Bang said:

The teacher loans that I have seen are usually comparable to VA as they are no money down etc.

I’ve heard of some that are straight grants, they give you a loan for a down payment and if you stay in the home long enough the loan is forgiven.

I would say when you are ready to buy, sit down with Phil or another knowledgeable lender and see what’s exactly available to you and make a decision at that time.

You’re gonna want to go the VA route rather than the teacher route. Those Teaching programs are good on paper, but require a ridiculous amount of hoop jumping. 

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3 hours ago, kmac30 said:

Thanks for the info. I spoke with the realtor and we came to an agreement. They want this deal to go through and so does the realtor. A call for the appraisal was made On Friday. It hasn’t been scheduled yet but I’m expecting to hear back Monday or Tuesday. It should be complete in a couple weeks and we’ll know then.

In the mean time we’re reaching out to some other interested parties and letting them know what’s going on.

Good.  Please, re-read my post about preparing for the  appraisal.  If you don't have the smoke alarms and carbon detector in, they appraiser will charge a re-inspection fee, and the buyer will almost certainly expect you to pay that. 

Keep  us posted, and feel free to reach out via PM if you need any advice. 

Understand, that the broker on this deal is looking out for his client's best interests, not yours.   I do a lot of FHA deals, and I'm happy to help.

Edited by Gil Bang
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Had a contractor over to quote me for a house project.  Just wanted to run this by you guys for a sanity check.  We're not in the US so local prices and practices are different, and at the same time language barrier makes us not want to deal with tons of contractor for quotes.  Just want to make sure the numbers are not off on the wrong planet.

 

* Replace 600sqft worth of floor (wood on concrete).  Guy says about $3500 all-in with labor, "engineered wood" planks (wood on plied cores), trims, etc.

* Labor for refacing/repainting walls and ceilings, full kitchen replacement, and tiling of kitchen.  Guy says $6000.  We provide cabinets, tiles, appliances, backsplash.  He does everything else... rip down existing kitchen, light demo work, light electrical and plumbing (relocating sink), installation of things.  Full repainting of drywall and ceiling of ground floor. 

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On 3/24/2019 at 3:23 PM, 52-80 said:

Had a contractor over to quote me for a house project.  Just wanted to run this by you guys for a sanity check.  We're not in the US so local prices and practices are different, and at the same time language barrier makes us not want to deal with tons of contractor for quotes.  Just want to make sure the numbers are not off on the wrong planet.

 

* Replace 600sqft worth of floor (wood on concrete).  Guy says about $3500 all-in with labor, "engineered wood" planks (wood on plied cores), trims, etc.

* Labor for refacing/repainting walls and ceilings, full kitchen replacement, and tiling of kitchen.  Guy says $6000.  We provide cabinets, tiles, appliances, backsplash.  He does everything else... rip down existing kitchen, light demo work, light electrical and plumbing (relocating sink), installation of things.  Full repainting of drywall and ceiling of ground floor. 

What country?  Just out of curiosity

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2 hours ago, Grippe said:

VA loans are the tits that never sag - no $ down, no penalty for early pay-off, no PMI and the list goes on.

And because I mentioned tits rules must be followed...

  Reveal hidden contents

the-worlds-most-beautiful-breasts-keeley

 

Yep and rates are lower than conventional. Usually by a good bit. 

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VA loans are the tits that never sag - no $ down, no penalty for early pay-off, no PMI and the list goes on.

 


When I was selling and buying different houses when moving, VA loans were viewed as possibly more problematic than conventional. I think it was because the home had to appraise as at least as much as the loan value which didn’t always happen when the buyer was putting 0% down.

Is that still a problem?
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Only in a depressed market (though I will defer to Phil). In a  growing market like Travis/Williamson counties the VA has not been a hurdle for me (3 loans in a 19 year span).

Edit: as a data point - I just moved into a `stagnant` market (Palo Pinto county) and the VA was a breeze.

Edited by Grippe
I can't stfu
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When I was selling and buying different houses when moving, VA loans were viewed as possibly more problematic than conventional. I think it was because the home had to appraise as at least as much as the loan value which didn’t always happen when the buyer was putting 0% down.

 

Is that still a problem?

 

Sort of.

 

It’s always a problem when homes appraise for less than contract price. Always.

 

Doesn’t matter if it’s VA,FHA, or conventional. It’s a problem.

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VA is more stringent on appraisals. But as Gil said contract and appraisal price is gonna be a discussion if it’s lower regardless of loan type. The only other thing is VA is a little bit (3-5 days, not much) longer contract to close than other things. But nothing of concern. 

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Interesting..

Quote

Top White House economic advisor Larry Kudlow wants the Federal Reserve to “immediately” cut interest rates by 50 basis points.

“I am echoing the president’s view – he’s not been bashful about that view – he would also like the Fed to cease shrinking its balance sheet. And I concur with that view,” Kudlow told CNBC Friday.

 

“Looking at some of the indicators — I mean the economy looks fundamentally quite healthy, we just don’t want that threat,” he added. “There’s no inflation out there, so I think the Fed’s actions were probably overdone.”

The comments from President Donald Trump’s Director of the National Economic Council follow the central bank’s decision to hold off on raising rates last week. The Fed also suggested at its most recent meeting that a hike in borrowing costs may not be needed for the rest of the year.

 

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19 hours ago, Gil Bang said:

no CR, but Kudlow can want in his left hand and shit in his right, and I'll promise you, the right hand will be filled first. 

Right.  I just thought the quote was an interesting thing to say, as basically rates have dropped almost half a point in the past month or so.  

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On 3/21/2019 at 6:03 PM, kmac30 said:

We were going to put our house on the market in a few weeks and word got out. Long story, but we had a bunch if people contact us over the last few months and after speaking with someone got an offer from someone with a broker.

Going over the offer, they have an FHA loan. The only problem I see with the contract is that they can get out 3 days before close if it doesn’t appraise (Property Approval). That’s a problem. Can I write something to shorten that up? We’re going to close in 45 days.

How'd everything go with this FHA contract/offer @kmac30

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Thanks for asking. Guy came to appraise on Friday morning. Wife was there and tried to be really nice. He asked her a few questions about things we had done but he wouldn’t take the list we had written out.

We’re expecting to hear back from them today or tomorrow. Wife doesn’t feel good about it for no reason other than she worries a lot. I think it’ll al work out in the end.

After this all clears out, I might need to talk to you(Phil) about a few things.

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33 minutes ago, kmac30 said:

Thanks for asking. Guy came to appraise on Friday morning. Wife was there and tried to be really nice. He asked her a few questions about things we had done but he wouldn’t take the list we had written out.

We’re expecting to hear back from them today or tomorrow. Wife doesn’t feel good about it for no reason other than she worries a lot. I think it’ll al work out in the end.

After this all clears out, I might need to talk to you(Phil) about a few things.

Perfect.  I think Thad may have emailed you this morning doing our check ins, but you know where to find me/him.

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51 minutes ago, kmac30 said:

Thanks for asking. Guy came to appraise on Friday morning. Wife was there and tried to be really nice. He asked her a few questions about things we had done but he wouldn’t take the list we had written out.

We’re expecting to hear back from them today or tomorrow. Wife doesn’t feel good about it for no reason other than she worries a lot. I think it’ll al work out in the end.

After this all clears out, I might need to talk to you(Phil) about a few things.

Doubt you will hear today.  

So, now days appraisals are all done through a 3rd party to prevent fraud.  

So, the lender has a loan file open.  He needs an appraisal.  Ten years ago, he picks up the phone, calls an appraiser directly, and "may" have said "hey asshole, I need this thing to come in at x dollars, so if you want any work from me in the future, make it happen". 

 

Now, the lender calls an appraisal management firm.  They take the order,  and they assign it to an appraiser.  The appraiser does his thing, returns it to the appraisal management company, they do a review, and then they send it back to the lender.  

The extra steps often result in an extra day or two. 

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Soooo, appraisal just came in. Realtor called my wife and is shocked. Way under where she thought it would be and our contract.

She said the comps are crazy and make no sense (there aren’t any good comps in our hood because most houses sell without going on MLS). She also said it’s so hard to appraise our hood because they don’t know the value of the demand. He priced our house under what most other houses sold for recently. She said her buyers are devastated because they know we aren’t going to take it.

I spoke with her and we’re exploring another option.

It’s crazy and makes no sense. He used houses that are in different neighborhoods and different school districts (worse). No one wants to live there!

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Yeah...here's where you get hurt by not having representation.    A knowledgeable listing agent would have met the appraiser, provided comps, and told the appraiser why specific comps aren't appropriate.  

Keep in mind that FHA appraisals stay with the property for a few months, so if you accept another FHA offer, they may use the same appraisal.  

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Soooo, appraisal just came in. Realtor called my wife and is shocked. Way under where she thought it would be and our contract.

She said the comps are crazy and make no sense (there aren’t any good comps in our hood because most houses sell without going on MLS). She also said it’s so hard to appraise our hood because they don’t know the value of the demand. He priced our house under what most other houses sold for recently. She said her buyers are devastated because they know we aren’t going to take it.

I spoke with her and we’re exploring another option.

It’s crazy and makes no sense. He used houses that are in different neighborhoods and different school districts (worse). No one wants to live there!

Remind me where you live?
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5 hours ago, kmac30 said:

Soooo, appraisal just came in. Realtor called my wife and is shocked. Way under where she thought it would be and our contract.

She said the comps are crazy and make no sense (there aren’t any good comps in our hood because most houses sell without going on MLS). She also said it’s so hard to appraise our hood because they don’t know the value of the demand. He priced our house under what most other houses sold for recently. She said her buyers are devastated because they know we aren’t going to take it.

I spoke with her and we’re exploring another option.

It’s crazy and makes no sense. He used houses that are in different neighborhoods and different school districts (worse). No one wants to live there!

Then have the Realtor pulls some comps  that support the value and submit to the lender and ask for a reconsideration of value. But there has be supporting evidence provided

"there aren't any good comps" won't get you very far. If there are sales in the neighborhood to use, they usually have to be utilized. If there truly is not anything comparable, find some in similar nearby neighborhoods (age, school district, etc) that would be considered as competing properties to yours (sg ft, age etc).

As Gil Bang pointed out, that FHA appraisal will remain with the property for 120 days 

 

Edited by Buddy Hinton
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14 hours ago, Dbeasy said:

Phil can probably run some comps for you. I have access to Austin MLS but not that area anymore.

Yeah I gave it a whirl, I can see what the Appraiser ran into.  Like the guy above said his realtor can really do a deep dive into it and find ones that may support their value for reconsideration, but she's got her work cut out for her.  

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10 year trickling back up (15 basis points past few days).  If any of you were wanting to look at a straight refi, get out of an ARM, cash out refinance, 30 to 15, or if you were close on a Purchase I'd say shoot me an email today and let's see what we can do - pdubord@prodigymbo.com

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Learn me on re-casting a mortgage.

Monthly payments on our new build will be pretty high, but we should have a nice chunk of equity when we sell the current house that we're planning to put right back towards the new loan and then have them re-run the amortization schedule to lower our monthly payment. Seems to be a much simpler option than doing a full-blown refinance.

From what I've read, most lenders just require that your lump sum payment meet a minimum threshold and will charge a small fee around 1% of the amount paid. Are there any  limitations? Any reason why a lender would not allow it?

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9 hours ago, Storm the Field said:

Learn me on re-casting a mortgage.

Monthly payments on our new build will be pretty high, but we should have a nice chunk of equity when we sell the current house that we're planning to put right back towards the new loan and then have them re-run the amortization schedule to lower our monthly payment. Seems to be a much simpler option than doing a full-blown refinance.

From what I've read, most lenders just require that your lump sum payment meet a minimum threshold and will charge a small fee around 1% of the amount paid. Are there any  limitations? Any reason why a lender would not allow it?

Sure.  If the loan is securitized and sold off in a pool to multiple investors, it's too fucking cumbersome to get everyone's approval.  If it's held in the lender's portfolio, it's doable.   Im guessing you'll end up with a full refinance. 

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On 4/4/2019 at 9:49 AM, Storm the Field said:

Learn me on re-casting a mortgage.

Monthly payments on our new build will be pretty high, but we should have a nice chunk of equity when we sell the current house that we're planning to put right back towards the new loan and then have them re-run the amortization schedule to lower our monthly payment. Seems to be a much simpler option than doing a full-blown refinance.

From what I've read, most lenders just require that your lump sum payment meet a minimum threshold and will charge a small fee around 1% of the amount paid. Are there any  limitations? Any reason why a lender would not allow it?

Should be a one time thing you should be able to do.  Call your servicer and ask them about making a one time down payment recast.  If you need Thad or mine's help with that just shoot me or him an email

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On 4/3/2019 at 9:38 AM, UTPhil2006 said:

10 year trickling back up (15 basis points past few days).  If any of you were wanting to look at a straight refi, get out of an ARM, cash out refinance, 30 to 15, or if you were close on a Purchase I'd say shoot me an email today and let's see what we can do - pdubord@prodigymbo.com

Gave back about 6 of those basis points, hanging around in the 2.40's now

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On 4/1/2019 at 1:06 PM, kmac30 said:

Soooo, appraisal just came in. Realtor called my wife and is shocked. Way under where she thought it would be and our contract.

She said the comps are crazy and make no sense (there aren’t any good comps in our hood because most houses sell without going on MLS). She also said it’s so hard to appraise our hood because they don’t know the value of the demand. He priced our house under what most other houses sold for recently. She said her buyers are devastated because they know we aren’t going to take it.

I spoke with her and we’re exploring another option.

It’s crazy and makes no sense. He used houses that are in different neighborhoods and different school districts (worse). No one wants to live there!

Any update from the realtor/comps/showings @kmac30?

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